Wipro Q4FY23 results this week- Net profit may grow in double digits; revenue to rise on strong deal wins

Wipro Q4FY23 results this week: Net profit may grow in double digits; revenue to rise on strong deal wins

IT services major Wipro is expected to clock a net profit rise of as much as 15.2 per cent on-year during the fourth quarter ended March 31, 2023, even as few other analysts estimated that profit for the quarter would fall by around 4.9 per cent. According to analysts and brokerage firms, Wipro is expected to report a double digit growth in revenue with estimates going as high as 12.3 per cent, aided by strong deal wins. Margins are also likely to improve slightly due to strong volume growth and strong executions, said Axis Securities.

Wipro will announce its March quarter results on Thursday, April 27. The results announcement will be followed by a press conference by the senior management of the firm. Wipro has also said that it will consider a buyback along with the results announcement. “Wipro had a net cash balance of Rs 221 billion, which could possibly increase to Rs 250 billion by end-March 2023. The company has enough cash reserves to pursue a buyback as part of capital allocation policy,” said Kotak Institutional Equities.

ICICI SecuritiesRevenue: Rs 23,494.7 crore; up 12%EBITDA: Rs 4,619.0 crore; up 8.6%PAT: Rs 3,040.5 crore; down 4.9%

Axis SecuritiesRevenue: Rs 23,452 crore; up 12.4%EBITDA: Rs 3,870 crore; up 13.7%PAT: Rs 3,556 crore; up 15.2%

HDFC SecuritiesNet sales: Rs 23,422 crore; up 12.3%EBIT: Rs 3,649 crore; up 7.2%APAT: Rs 3,021 crore; down 2.1%

Kotak Institutional EquitiesNet sales: Rs 23,492 crore; up 12.0%EBITDA: Rs 4,560 crore; up 7.2%Reported PAT: Rs 3,136 crore; up 1.6%

Elara CapitalNet sales: Rs 23,662 crore; up 13%EBITDA: Rs 3,902 crore; up 11%Recurring PAT: Rs 3,252 crore; up 5%

BOBCAPSRevenue: Rs 23,421 crore; up 12.3%EBIT: Rs 3,771 crore; up 6.3%PAT: Rs 3,138 crore; up 1.5%

SharekhanSales: Rs 23,715 crore; up 13.1%Operating margin: 19.8%Net profit: Rs 3,238 crore; up 4.9%

Wipro’s performance on sequential basis

Wipro is expected to report a QoQ revenue decline of 0.5 per cent, said ICICI Securities. “Exposure to impacted verticals such as hi-tech and consumer, slowdown in discretionary spending and higher exposure to consulting are the drivers of revenue decline in our view. We expect a 10 bps decline in EBIT margin QoQ to 16.2 per cent,” said Kotak Institutional Equities.

What to watch from Wipro Q4FY23 results?

As Wipro is all set to announce its quarter earnings for Q4FY23, investors are looking at client budget commentary, growth and margin guidance for FY24 from the IT company. “We expect investor focus on: 1) next steps in turnaround which has hit a roadblock with return to industry lagging growth on organic basis; 2) stability in senior management team, given several senior level departures; 3) outlook for consulting business (Capco and Rizing), which can be impacted due to pullback in discretionary spending; 4) outlook for tech spending in BFS and impact of exposure to impacted companies- SVB, Silvergate, Signature Bank and Credit Suisse; 5) cause for divergence in revenue growth and reported deal bookings; 6) positioning in cost take-out and vendor consolidation deals where Wipro can be vulnerable; 7) margin levers to meet aspirational margin level of 17%+; and 8) capital allocation given build-up of cash reserves,” said Kotak Institutional Equities.